Rwandan Apparel to Face Higher Tariffs in 60 Days

Rwandan apparel exports will no longer receive benefits through the African Growth and Opportunity Act, because the small African country refused to back down from its coming ban on used clothing imports. The Office of the U.S. Trade Representative intends to suspend duty-free treatment for "all AGOA-eligible apparel products from Rwanda in 60 days." Increased tariffs on Rwandan apparel will have a minimal effect on trade figures between Rwanda and the U.S., according to the AGOA website. The U.S. exported $75 million worth of goods to Rwanda in 2016, and imported $26 million. Apparel is not in the top five categories for Rwandan exports to the U.S., and total apparel exports to the U.S. from there are under $300,000 annually. In 2016, $18 million, or 69 percent of all Rwandan exports to the U.S., were coffee.

Used clothing exporters complained in March 2017 about a planned ban on used clothing imports in Rwanda, Tanzania and Uganda, and the USTR began a review in June that year. "The review found that this import ban harms the U.S. used clothing industry and is inconsistent with AGOA beneficiary criteria for countries to eliminate barriers to U.S. trade and investment," USTR said in a press release. AGOA benefits from Tanzania and Rwanda won't be affected, because "each has taken steps toward eliminating prohibitive tariff rates on imports of used clothing and footwear and committed not to phase in a ban of these products. The United States will continue to monitor whether Tanzania and Uganda implement these commitments and demonstrate compliance with all of AGOA’s eligibility requirements," USTR said.

Isaac Mugabi, a German newspaper columnist, wrote in an opinion piece that Tanzania and Uganda caved to U.S. demands. Mugabi wrote, "A ban on second-hand clothes is premised on the fact that promoting East Africa's textile industries will provide thousands of jobs. And with this idea at the back of their minds, the leaders wanted to bring an end to the protectionist policy being pushed by the Trump administration. Now that they have swallowed the bitter pill, it's a partial victory for the Trump administration and business will continue as usual."

The coalition representing recycled textiles claimed that 40,000 U.S. jobs related to collection and shipping of used clothing would be negatively impacted by a ban by the three countries. Rwanda imports about $300,000 worth of U.S. apparel a year. According to USTR, Rwanda imports $55 million in U.S.-built aircraft. After the review began, apparel importers said the used clothing group was wrong to push for expelling the countries from AGOA, as they have barely begun to develop apparel industries (see 1707030033). The Commerce Department estimates that U.S. exports to Rwanda support 59 American jobs (as of 2015, the latest year of available figures).